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Credit Card Advance

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When you need some money and it is required very quickly, you can take a cash advance on a credit card. The process itself is fairly easy, but it can be a problem in the future. Let’s try to figure out what kind of banking service this is.

 

What is a credit card advance?

If you understand what an ordinary advance is, then you can easily imagine the essence of this service. In a nutshell, this is a cash advance in the form of a loan that your credit card can provide you. In most cases, you can get cash up to a certain limit. These restrictions depend on the card itself, but they, as a rule, are an order of magnitude lower than the credit limit. You can easily get quick money: at the bank office or at an ATM.

 

Why you should not take an advance on a credit card?

Using this service is really very convenient, and you can get money instantly. However, the price you pay for such convenience can be extremely high.

Cash withdrawal fee

First of all, we are talking about withdrawing cash from the card, and this is already a rather expensive service. Most likely, the bank assumes a high fee in the region of 5% of the withdrawal amount. Do not forget to use an ATM of your bank, in order not to pay extra commission.

High interest rates

When you paid for cash withdrawals, you did not make a payment in favor of a new loan, you paid only for being able to get money in your hands. Get ready for a higher percentage if you decide to take a down payment on a credit card than you already have on your current loan. For example, even if you paid about 12% – 15% per annum for purchases, you will be charged about 24% for this service.

No grace period

When you make purchases by credit card, you have from one to two months, depending on the card, to return the money without paying interest. The grace period allows responsible borrowers to take advantage of the convenience of credit cards and build their credit score without putting themselves into large debts. But when you received a cash advance on a credit card, you do not have a grace period. Your account will be charged a high interest rate immediately.

 

The true cost of a credit card advance

The true cost of a credit card advance

Let’s look at an example of how expensive this service can be.
For example, you needed 20 000 rubles in cash. Buy urgently household appliances, repair cars or other. To get this amount on your hands, you first have to pay 1000 rubles (5% of the withdrawal amount) in the form of a down payment. After that, the clock starts to tick – 24.9% per annum began to accrue and the debt began to grow.
What if you can afford to pay only 1500 rubles a month to pay a new loan? Summing up the main debt and accrued interest, in the end you can pay up to 30,000 rubles within 20 months. Add to this amount fees, and you pay already 31,000 rubles in order to get 20,000.

 

Is there an alternative?

If you find yourself in a situation where you urgently need cash and you cannot pay with your credit card, there are other ways to get out of the situation.

Perhaps the first thing that comes to mind is to contact friends or family members. It may hurt your pride, but if you are really in a difficult situation, someone who you know well, can come to the rescue. But remember that your relationship with a person may deteriorate due to the fact that you do not have time to give money on time. For some people, this is a pretty big risk.

Advance payment can be requested at work. If you have a good relationship with your employer, you can be provided with money for future salary. In a small company, you will most likely just need to thank the management for the good attitude towards you. In a large organization, a similar process may already be established and you may be charged for the service. In any case, if you borrow money from friends or at work, be careful, it is impossible for this to become a habit.

 

Microfinance organizations

Microfinance organizations

To quickly get the necessary money – you can take a loan by contacting the Payday Loan. If you already have a credit history, a valid loan and you are a paying client, you will be given a loan very quickly. From the beginning of the filing of the application to the receipt of money on hand can go from an hour to one day.

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